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Archive for the ‘Scam’ Category

Apartment Rental Fraud

Thursday, January 27th, 2011

If you are looking for a place to rent and happen to come across a rental listing with lower-than-average price, do not jump up and down in excitement. Instead, keep the alert flag goes up in your brain.

Scammers target the users of Craigslist and other classifieds websites and place the rental ad with ridiculously low prices. For example, they put a listing for 1BR furnished apartment for $425 whereas the going rate in the market is $1,000 for similar apartments. The price is the bait. Once you fall for it and send an email to the ad poster, you would get the response something like the one below:

Thank you for the most eloquent response to my listing, I’m the owner of the apartment you are making inquiry of. Actually i resided in the apartment with my family, before i lost both parents in a ghastly motor accident so i had to relocate to Africa with my fathers half brother working in an oil firm in Africa.(W.AFRICA) and presently my apartment is still available for rent which i inherited from my late parents . It includes  utilities like hydro, washer and security, I have my furniture in the apartment. if you which to move in with your furnished items there is a storage area where you can move my furniture’s, no problem. Please i want you to note that i am a kind and honest  young man and also you should know that my parents must have spent a fortune on the property that i want to give you for rent, i will want you to take absolute care of my apartment and I want you to treat it as your own, money is not the most important thing but i want you to keep it tidy all the time so that i will be glad to see it neat when i come for check up. RENT INCLUDES CABLE, HEAT/AIR, WATER, GAS AND INTERNET!!!

N:B :  You will not be able to see inside of the apartment because the keys/document is here with me, you can only go by it and view from the exterior/surroundings, it’s located in a convenient, safe and good location. You would love to call it a home….

Nice email, isn’t it? If you fall for it and decide to rent the apartment without even looking inside, the scammer will ask you to send money to his african bank account and promise you that he will mail you the key thru UPS. By now, you would have probably guessed what would happen after you send the money to the scammer.

If you are naive and decide to send the money anyway for the fear of losing the super sexy apartment, you will never get the key for the apartment. You may be even surprised to know that the property owner is living right there in the apartment with his parents and have no idea about who placed the rental ad.

Criminals Target Unemployed

Friday, October 22nd, 2010

Being unemployed for months is horrible, getting cheated on top of that is very frustrating. Wall Street Journal published article detailing a scam that targets unemployed people. The scheme works like this. Crooks establish a company, website and post online job ad in job portals like careerbuilder.com. When the applicant sends the resume, the company asks the applicant to take some trial projects to ship certain items to Europe. To pay for these items, the company transfer the money to the applicant’s credit card. For each shipment, the applicant earns $350 in commission.

Sounds simple? Easy job, isn’t it? Only problem is that the money transferred to the applicant’s credit card is the stolen money. Read the complete article here.

ATM Skimming – How to prevent ATM card theft?

Tuesday, October 12th, 2010

You don’t need to lose your ATM card for someone to steal the money from your account. You just need to swipe the card in a compromised ATM machine to give all your information to identity thieves. ATM Skimming is the process in which crooks steal your ATM card information without your knowledge. Wall Street Journal published article detailing this prevalent identity theft problem.

It’s always a better idea to use the ATM machines only in the bank branches. Do not use the ATM card when you travel abroad. Do not use ATM card in gas stations, strip clubs and in any place where the ATM machine looks different than usual. According to Wall Street Journal, sophisticated skimming devices are placed right over a card-reader slot that allows the scammers to capture the information embedded on the magnetic strip of a debit or credit card. Camera mounted on the right place also captures your hand movements and PIN number. If you are curious about how a skimmer would look like, take a look at the following video.

It’s highly recommended to cover the keyboard with the other hand when you key in your PIN to block anyone or a camera from seeing your PIN. This may seem paranoid, but it’s better to look paranoid than actually losing lot of money. If the ATM machine looks different than usual or if it looks crooked or damaged, just walk away.

Related Link: Man accused of installing cameras in ATM machines

Largest Hedge Fund Insider Trading Scheme in History

Friday, October 16th, 2009

Wall Street has had its fair share of scams and those who have taken advantage of investors over the past year or two, and today there was news of another major insider trading scheme. Federal prosecutors are accusing Raj Rajaratnam, the billionaire founder of Galleon Group, as well as five others of the single biggest insider trading scheme ever in the history of hedge funds. The charges allege that Galleon Group, the famous hedge fund, made almost $17 million trading on inside information about PolyCom, Hilton, Akamai, Google, Clearwire, AMD, and PeopleSupport and their corporate results and impending news.

All of the defendants were caught by sophisticated devices such as wiretaps, which is a first time thing for federal prosecutors when it comes to finding insider trading. The prosecutors received court permission on March 7, 2008 to intercept phone calls in Rajaratnam’s cell phone. During the process their seems to have been some very damning evidence, including one call where Danielle Chiesi (another of the accused) tells a co-conspirator they need to keep their mouth shut about the evidence or “I will be like fuc#### Martha Stewart.” Rajaratnam was ranked the 559th richest man in the world on this past year’s Forbes list.

Prosecutor Preet Bharara said this is the largest insider trading scheme ever and the tactics used were also innovative and show that the government will not let this kind of white collar crime take place. Prosecutors hope that a massive case like this will discourage other money managers from trying to get away with insider trading.

Inside the hedge fund world there was a lot of squirming today as many traders worry that every single thing they say about a publicly traded company could be used against them. Personally, I think the government should only use these methods when they have been previously tipped, as they were in this case. In the long run though, it is good for all investors when insider trading schemes are brought down. This is just another lesson in of how common and real investment scams are. Be very careful out there!

Top four common work at home scams to avoid

Friday, September 18th, 2009

So many people have been looking for ways to make some extra income, ways to help pay the bills because of the difficult economy. This has led to more people than ever looking for work at home jobs for an extra income, or even for their entire income. While there are legitimate work at home jobs, did you know that 99% of the work at home advertisements you see on the Internet are scams? Before you go investing your time or money into a work at home job, make sure you avoid these four common scams.

Four Common Work at Home Scams

  1. Envelope stuffing- This is probably the oldest one in the book, but it continues on even to this day. Trust me when I tell you, you won’t be stuffing envelopes for a living. The people placing these kinds of ads aren’t looking for envelope stuffers, but rather people who will pay a registration fee and then place the advertisement somewhere else. Stay away from these scams!
  2. Processing medical insurance claims- If you think about it there is no way any legitimate doctor is going to contract out their insurance claims to an unproven person or firm. Don’t pay for medical insurance claim “training” that is supposedly so easy you can learn it in no time.
  3. Multi-level marketing schemes- There are legitimate multi-level marketing companies, but the truth is most of the multi-level marketing advertising you’ll see are nothing but a pure pyramid scheme. How can you tell the difference? Typically in a MLM scam they will be more concerned with you getting other people to join under you than selling any product.
  4. Craft or assembly work- Many scam artists like to use people’s talents against them, and that is exactly what happens in these types of scams. You’ll hear that you can earn money by assembling products or crafts for this company, but once you start crafting and assembling (after you have paid them money for instructions), you won’t hear back from the company.

Four characteristics of an investment scam

Monday, August 17th, 2009

Investment scams are extremely common now, and even if you are not typically the easily persuadable type you could fall for one of these sophisticated scams. While some groups may be targeted more than others, everyone on the Internet is at risk. Let’s take a look at some major characteristics of an investment scam.

Four characteristics of an investment scam

  1. Unsolicited email or mail- If you didn’t ask for that  investment brochure in the mail or that message in your inbox, that should be your first warning that this could be an investment scam. Most investment scams occur when the scammers come looking for someone to prey upon, not when the prospective investor searches for an investment.
  2. Unrealistic guarantees- It is just like the old saying goes “If it sounds to good to be true it probably is.” This fits very well in the investment industry, since there is no sure thing and any kind of ridiculous expectations or guarantees are a classic sign of an investment scam. Keep your expectations in the realistic category!
  3. Pyramid schemes- At the first sign of a pyramid scheme you should run the other way, quickly. Pyramid schemes often claim a small investment will turn into a huge profit in small amount of time. These are multi level marketing pyramid schemes that payoff the people who start it, but almost everyone else simply gets scammed out of their money.
  4. Offshore accounts- One of the classic investment scams is that of someone requesting money be sent to an offshore account for investment advice or some kind of great investment program. These offshore investment scams are all over the place and should be avoided at all costs. Sending money to an offshore account hoping for big profits is a major mistake.

The wise consumer should be able to avoid investment scams, but you have to recognize these investment scam red flags before you it is too late!

Avoid pump and dump stock scams

Tuesday, August 4th, 2009
Penny stocks are breeding ground for these scams

Penny stocks are breeding ground for these scams

This is the era of the scam. It is sad, but in the recession when people are desperately looking for money the scammers come out in full force to take advantage of that need for money. One of the most common stock scams is the pump and dump scam.

How does a Pump and Dump Stock Scam Work?

The classic pump and dump stock scheme will start out with a person or a group of people purchasing a huge number of shares of a certain stock, generally a penny stock since they are much easier to manipulate. After they have purchased the stock they will then do everything in their ability to get out positive news about that particular stock, even if it means making up stories or issuing false press releases. There are a few common methods of transporting the message about this new “hot stock.” The most common methods are through email spam, penny stock message boards, or a simple flyer in the mail. These advertisements often promise huge results that are completely unrealistic in almost all cases.

Results of the Pump and Dump Scams

You may be wondering what generally happens when the scammers try to get you to buy a stock in order to make a quick buck. Generally the stock pops higher right after the stock becomes the subject of the scam, then quickly loses ground and falls back to where it started or even lower. In general the scammer ends up making a solid amount of money and the majority of people who bought the stock based on the tip will lose money in the period of a few days.

How can you avoid pump and dump scams?

The most important thing you need to know is this generally happens in penny stocks, which trade on pink sheets and are unregulated. It is much easier to fabricate stories about companies most people know very little about, which is why the scams typically originate in this area. It is very important that you not take the advice of people who send you email spam or give stock tips on penny stock forums or penny stock message boards. If you receive any kind of unsolicited stock advice, my best piece of advice for you is to put it in the trash and move on with your life. There are plenty of solid financial experts in this world, so there is absolutely no need to follow the lead of someone giving you unsolicited advice.

Three signs of an investment scam

Wednesday, June 17th, 2009

The sad truth of the matter is in today’s economy scams are becoming more numerous by the day, and investment scams are one of the fastest growing types of scams. Why do stocks lend themselves to scammers trying to take advantage of people? It’s quite simple really, stocks are held by investors who are  looking to make money and those scammers are feeding on the need for the consumer to make money. Where there are investors looking to make huge returns there are scammers that are promising those unrealistic returns.

Three Major Signs of an Investment Scam

  1. Unrealistic promises- This is definitely the easiest way to look for a stock scam. Scammers often sell their investment services as bring a “guaranteed” return of a huge amount, or tout an average return which is clearly not attainable. Don’t fall for these ridiculous figures, rather be realistic and understand that this is a very bad sign.
  2. No clear strategy- Always make sure you have a clear understand of what kind of strategy is going to be used to try to help your investment portfolio. Investment scammers are good at glossing over the facts and the details of exactly how they will make your investment grow. If you don’t understand how they will make you money, you shouldn’t be investing with them.
  3. No risk involved- Any real investment manager understands that there is always risk involved in putting your money into investments such as stocks, mutual funds, and other similar assets. There is no such thing as an investment in stocks that comes without risks. As soon as you hear “no risk involved,” head for the exits.

Investment scams can be difficult to pick up on because these schemes can be very well thought out. When investing your money remember that investing is a very serious task that requires plenty of homework and thorough research. There is no “simple” method of growing your money through investing.

Student Loan Scams

Thursday, May 14th, 2009

Have you received e-mails or telemarketing calls that offer a one time chance to avail great student loans which you can never find elsewhere? The offer may be tempting but beware because the student loan industry has become a predatory one. Students who take loans find themselves burdened with debts amounting to thousands of dollars by the time they graduate. Not only this, if you default on loans, be ready to sacrifice the life and career you have managed to build up since college. Many people have their professional licenses revoked on account of defaulted loans.

Government sponsored federal loans have a fixed interest rate of about 6% to 6.8%. Private loans on the other hand work more like credit card debt. They have interest rates of 15% or more.  The problem here is that much of the federal loans are provided by profit oriented private lenders. So, students take loans from lenders like Sallie Mae thinking that it is government funded only to find out later that they actually hold a private loan. The difference is enormous and upsets whatever plans they may have had to repay the loan. Those students who have fallen into the trap of high cost private loans find themselves using more than 40% of their income to pay off these loans.

Unfortunately, with interest adding up by the minute, most people find repayment difficult. As a matter of fact, there are about five million federal student loans currently in default, amounting to over $38 billion in bad debt. The sad part is that students who have defaulted on loans find themselves at the mercy of lenders. This scenario prompted Alan Collinge to set up a grass roots organization called StudentLoanJustice.org.

StudentLoanJustice.org has a political action committee that aims to campaign for legislations which provide consumer protections, including full bankruptcy protections, statutes of limitations, and refinancing rights to all student loans. It also aims for legislations that will permit defaulters 5 years or more to repay the principal amount along with a reasonable amount of interest. Another goal of this organization is to provide long term repayment caps that will limit the amount that can be collected from borrowers over a period of 10, 15, 20 or 25 years. In this way, borrowers would be allowed some relief from the burden of debt. As mentioned earlier, defaulting on loans can result in cancellation of professional licenses. StudentLoanJustice.org aims to end this practice altogether.

StudentLoanJustice.org now has around 4000 members and still counting. This organization and the cause it supports have been credited as the inspiration for Hillary Clintons Student Borrower Bill of Rights. You can visit the StudentLoanJustice website to get an idea of how you can help in furthering this cause. For instance, you can learn more about the finer details of student loans or talk to reporters you know who would be willing to take up the issue or simply talk to others who are in the same situation as you are.

Out-of-network Insurance Scam

Saturday, March 28th, 2009

When patients go out of their health plan network, their plan is supposed to pay 70 percent of the doctor’s visit cost. It appears that insurance companies pay 70 percent of what it determines is the “usual, customary and reasonable” cost for the procedure or doctor’s visit in question. Insurance companies determine that cost themselves, and there’s no proper oversight of how they do it.

United Health Group is in hot water in this issue. It was allegedly manipulating claims data so that the “usual, customary and reasonable” costs they used were lower than they should have been, leaving patients to pay more. Sen. Jay Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee and New York Attorney General Andrew Cuomo are on the case.

I wonder how long these insurance companies were cheating the patients if the charges are true.

Source: Senators examining insurance companies’ out-of-network practices

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